TaxTMI 
TaxTMI 
2013 (9) TMI 354
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.... argued, but their submission was not considered, while passing the order which is in respect of only Appeal No.C/1783/1994. 3. Ld. Special Counsel appearing on behalf of the Revenue, would submit that there is an error as there are no findings on this issue. 4. On careful consideration of the submissions made by both sides and perusal of the records, we find that our Final Order dt.06.08.2012, in the preamble, mentions that we have disposed off two appeals of the appellant. The mere perusal of our order dt.06.08.2012, clearly indicate that we had not considered the submissions made in respect of Appeal No.C/01/2008, which is against the imposition of Additional Duty of Customs (CVD) on the vessel M.V. Jagat Priya, imported for breaking. 5. Since there is an error apparent on the face of record, our final order dt.06.08.2012, which is in respect of C/01/2008, needs rectification of mistake, we rectify the error in our Final Order dt.06.08.2012 by addressing the issue in these proceedings. 6. On merit, the ld. Counsel submits that the appellant had taken a plea before the lower authorities that the ship which is imported i.e. M.V. Jagat Priya, was for breaking and they filed a B....
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....ion of ld. Counsel that the appellant had challenged the operation of our final order dt.06.08.2012, which is against them in respect of Appeal No.C/1783/1994 before Hon'ble Apex Court. 10. On further perusal of the records, we find that the appellants claim is that the appellant is importing the ship for breaking in his yard and is not utilizing power in any form. It is the claim of ld. Counsel for the Revenue that Circular No.26/2004-CX, dt.31.03.2004 will apply and exemption from CVD should not be granted. We find that the circular which has been relied upon the ld.Counsel, would not carry the Revenues case any further as it is undesputed that the appellant has claimed the benefit of exemption Notification No.167/1986, dt.01.03.1986 before the lower authorities. We find that Hon'ble High Court of Karnataka in the case of Engee Industrial Services (supra), had considered the very same issue and the relevant paragraphs of the said judgment are reproduced. In these writ appeals, the question that arises for our decision is, whether the appellants are liable to pay additional duty in respect of a vessel brought in by them for breaking up in terms of the ....
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....M/s. Magnanda Shipping Corporation of Monroria, Liberia, for the purchase of the vessel at a price of US $ 1,164,150-00. Pursuant to the Memorandum of Agreement, the vessel was conveyed to the appellant under a Bill of Sale and the vessel arrived from St. Vincent at Mangalore on 26-7-1993. The appellant took delivery of the vessel at Mangalore Port under a Delivery Protocol dated 29-7-1993. 4. On 3-8-1993, the appellant presented a Bill of Entry to the Customs Appraiser, Office of the Assistant Collector of Customs, New Mangalore Port, the fourth respondent herein, bearing BE No. 07 dated 3-8-1993 relating to the import of the said vessel claiming classification of the vessel under Chapter 89.08.00 of the Act read with Notification No. 74/93, dated 28-2-1993. The basic duty has been indicated in the Bill of Entry as 5% ad valorem amounting to Rs. 22,62,073.00. The additional duty has been indicated as nil under Notification No. 167/86-C.E., dated 1-3-1986 read with Notification No. 44/93-C.E., dated 28-2-1993. The fourth respondent did not agree with the appellant's claim of nil rate of duty as far as additional duty is concerned and struck off the claim for nil rate of duty claim....
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....otification No. 167/86-C.E., the Central Government has exempted, inter alia, goods falling under Chapter 89 from the whole of the levy of excise where no operation is carried on in or in relation to the manufacture of the said goods with the aid of power. Therefore, under Section 3 of the Customs Tariff Act, no additional duty is payable on the vessel M.V. YAGUAR imported by the appellant for the purpose of breaking as the appellant is not carrying on any manufacturing activity i.e., ship-breaking with the aid of power. 6. Learned Single Judge, not agreeing with the above contention of the appellants that the demands raised by the respondents for additional duty are contrary to the provisions of the Act and without authority of law, dismissed the writ petitions. Hence, these four writ appeals by the aggrieved appellants. 7. We have heard Shri K. Naganand, learned Counsel for the? appellants and learned Central Government Standing Counsel for Revenue. 8. Shri Naganand would contend that the demand of? additional duty on the vessels imported is without jurisdiction inasmuch as under Section 3 of the Act, additional duty payable is equivalent to excise duty for the time being levi....
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....oms. The relevant portion of the said section reads as follows: Section 3. Levy of additional duty equal to excise duty. (1) Any article which is imported into India shall, in addition, be liable to a duty (hereafter in this section referred to as the additional duty) equal to the excise duty for the time being leviable on a like article if produced or manufactured in India and if such excise duty on a like article is leviable at any percentage of its value, the additional duty to which the imported article shall be so liable shall be calculated at that percentage of the value of the imported article. Explanation. In this section, the expression the excise duty for the time being leviable on a like article if produced or manufactured in India means the excise duty for the time being in force which would be leviable on a like article if produced or manufactured in India, or if a like article is not so produced or manufactured, which would be leviable on the class or description of articles to which the imported article belongs, and where such duty is leviable at different rates, the highest duty.  ....
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.... must also be nil. The requirement under Notification No. 167/86 that no power should be used in the process or in relation to the manufacture of the goods could, in the context of the language of Tariff Heading 89.08, mean the scrap produced by the breaking of the vessel. The appellant in the writ petition has categorically stated that no power is used in the breaking up of the vessels. This responsible statement made on oath is not denied by the respondents. 13. However, learned Single Judge has held that the product? imported is a vessel which falls under Chapter 89; for availing the benefit of Notification No. 167/86-C.E., dated 1-3-1986, it has to be seen whether the process of manufacture of the ship itself involves any use of power; imported vessel could not have been built without the aid of power and, therefore, the benefit of Notification No. 167/86-C.E., is not available to the appellant. In appreciating whether the above holding of the learned Single Judge is tenable in law, it becomes necessary to draw a distinction, at the threshold, between the usual import of a vessel for servicing and the import of a vessel for the purpose of breaking up. The two instances cannot ....